Consumer Products and Services

Apple’s Chinese apology worth the loss of face

1 Apr 2013

Today’s prosperous iPad buyers in China may not be swayed by what seems to be state-orchestrated criticism. But the tech giant’s admission of arrogance is a cheap salve to future, less well-informed buyers who might, as the Apple CEO hopes, make the PRC his biggest market.

"Made in China” still winning strategy for some

22 Mar 2013

Danish toy maker Lego is setting up a China factory just as British noodle maker Golden Wonder brings production home to England. While rising wages drive low-end manufacturers away, others will find shifting production closer to China’s wealthier consumers makes ever more sense.

Avon at last finding fragrance without Coty

12 Feb 2013

Shareholders pushed the cosmetics firm’s shares up 20 pct on Tuesday, bringing them near the highs last spring when Coty’s $10.7 bln bid - later dropped - was still on the cards. CEO Sheri McCoy, in the job for less than a year, has succeeded in giving investors hope again.

Chinese consumers move on from old favourites

30 Nov 2012

While China is still spending, some brands have lost lustre, judging by warnings from Yum Brands and jeweller Chow Tai Fook. Slower growth is natural as companies hit a certain size, but fast-shifting tastes are a factor too. Investors need new proxies for Chinese consumption.

Amped-up Carlyle gulps double dose of muscle milk

15 Oct 2012

After bulking up with acquisitions all this year, its first as a public company, the buyout firm is now stretching the balance sheet at vitamin maker NBTY to pay itself a $720 mln dividend with PIK-toggle debt. Such juicing may be easy again, but can have risky side effects.

Avon CEO at last has free hand for makeover

5 Oct 2012

Andrea Jung, the former boss of the U.S. beauty company, will relinquish her role as executive chairman at the end of the year. Sidelining Jung is overdue given the mess she left behind. Sheri McCoy, CEO since April, now has a better chance of rejuvenating the Avon Lady.

Americans can’t feel better than companies forever

27 Sep 2012

U.S. consumers are cheerier about life. But the corporate world is gloomier. If consumption jumps, it could soothe the business world’s blues. But the weak global economy and dysfunction in Washington are stunting hiring and could drag people down along with executives.

Consumer boycotts won’t decide Sino-Japan fight

19 Sep 2012

Protesters have called for shoppers to stop buying Japanese goods. But past attempts to snub French wine or Danish goods suggest this rarely works. And if Chinese workers attack Japanese factories, they would share much of the pain. Economic war looks reassuringly hard to wage.

Avon needs clean break from discredited Jung

1 Aug 2012

Revenue at the cosmetics giant is tumbling, and it’s losing sales reps in key markets like Brazil. New CEO Sheri McCoy wants to get back to basics. Yet Andrea Jung, her predecessor and architect of the chaos, is still executive chairman. Any value in her sticking around is gone.

Capital One case heralds end of sneaky fees

19 Jul 2012

The U.S. credit card issuer is paying $210 mln to settle charges of duping customers. The first big enforcement action by the new Consumer Financial Protection Bureau indicates the kind of innovation in its crosshairs. Lenders will have to be creative without being deceptive.

Mexico’s violence-hardened consumer looks safe bet

9 Jul 2012

Despite all the narcotics-related killings, Mexicans are confident, enjoy higher employment levels and have room to borrow more. Though stock market valuations reflect this apparent conundrum, more profit still may come from consumers south of the U.S. border.

Upstart EverBank zigs while GE Capital zags

2 Jul 2012

The industrial giant is shedding financial assets and trying to reduce dependence on wholesale funding. The newly public EverBank is taking the opposite tack, spending almost double its $1.3 bln market cap on GE’s Business Property unit, leaving it with more loans than deposits.

Avon punishes its own investors with its dawdling

15 May 2012

The cosmetics group’s hapless board compounded its enabling of failed former CEO Andrea Jung by offering a wishy-washy response to Coty’s compelling $10.7 billion merger offer. The deal is dead for now: No wonder shareholders’ mascara is running.

Coty’s freshened offer hard for Avon to resist

10 May 2012

The down-in-the-dumps U.S. makeup firm has until Monday to engage with Coty’s persistent advances. With the offer raised to $10.7 bln, the addition of Warren Buffett’s cash and blessing, and the possibility of a still higher price, Avon’s European suitor deserves a hearing.

New Avon CEO gets thrown in the deep end

1 May 2012

Sheri McCoy has inherited an even worse company than thought. The cosmetics company’s collapsing margins led to dismal Q1 results that question the value of the franchise and play right into the hands of suitors like Coty. McCoy needs to prove she can swim, and fast.

Coty will need to up its Avon game

11 Apr 2012

The U.S. cosmetics group has spurned Coty’s $10 bln approach and hired a new CEO. If Avon’s European suitor is really keen to marry makeup to its fragrances, it needs to pay more. A new Breakingviews calculator shows just how much bigger Coty’s proffered engagement ring could be.

Avon CEO hire risks making corner office crowded

9 Apr 2012

Sheri McCoy, Fortune’s 10th most powerful woman in business, should make a turnaround of the cosmetics firm a real alternative to a sale. But retaining Andrea Jung, the outgoing CEO and number six on the Fortune list, as executive chairman makes McCoy’s job look harder.

Buffett’s banker may come in handy for Coty

3 Apr 2012

The perfume maker will have to sweeten its offer from $10 bln to, say, $11.6 bln, to woo resistant Avon. That would mean $5 bln of equity, after factoring in debt and synergies. Byron Trott, a Coty adviser, might need to call in some favors, perhaps even from his biggest fan.

Avon’s hapless board opened door to Coty’s bid

2 Apr 2012

The cosmetics group rejected the $10 bln offer but will struggle to convince shareholders it has attractive alternatives to the LBO-like bid. Fealty to CEO Andrea Jung did less for Avon than Coty accomplished in a morning. It’s a useful lesson for pliant directors everywhere.

Kodak’s long-running woes are coming to a head

3 Nov 2011

The once high-flying photo company’s sales continue to slide. Kodak now says it needs to raise cash or sell more intellectual property inside a year if it’s to keep going. But offloading the firm’s crown jewels hasn’t worked in the past. And it may be harder than it appears.